Naspers Limited Class N · JSE:NPN
Naspers Limited Class N — FY2016 Earnings Presentation
49 slides from Naspers Limited Class N's earnings presentation, June 2016
Slide 1: Financial results presentation
Financial results presentation For the year ended 31 March 2016
Slide 2: Important information
Important information This presentation contains forward-looking statements as defined in the United States Private Securities Litigation Reform Act of 1995. Words such as “believe”, “anticipate”, “intend”, “seek”, “will”, “plan”, “could”, “may”, “endeavour” and similar expressions are intended to i
Slide 3: Strategic Overview
STRATEGIC OVERVIEW
Slide 4: FY16 Overview: building platforms to optimise returns
FY16 Overview: building platforms to optimise returns TARGET TRANSFORM LEAD IN OPTIMISE HIGH-GROWTH PURSUE SCALE FURTHER INTO ECOMMERCE RETURNS BUSINESS MODELS MOBILE 4
Slide 5: Lead in ecommerce
Lead in ecommerce Local leadership positions Global app leadership Global classifieds app sessions/day (m) Segment #1 positions Total # of markets Classifieds 34 40 Naspers B2C 9 11 Schibsted 2.2x Payments 6 16 eBay Source: SimilarWeb *As per Jan 2016. 5
Slide 6: Target high-growth business models
Target high-growth business models Daily net new listings Bus tickets sold Daily net new listings USA Number of orders - Brazil 37% 56% 377% 148% Mar 15 Mar 16 FY15 FY16 W1 W15 Mar 15 Mar 16 Local classifieds Bus ticketing Mobile classifieds Food delivery Source: Company data 6
Slide 7: Pursue scale
Pursue scale Classifieds: expanding our footprint Payments: accelerating local growth • Took control of leading Russian classifieds site TPV growth* (%), 2015–2016 148 123 • Launched real estate and car vertical apps in our core markets 46 Russia Turkey India Source: Company data * Currency neutral,
Slide 8: Transform further into mobile
Transform further into mobile Further smartphone growth will transform the world Global population (bn) Other Growth to 2020 0.8 2015 0.7 0.8 53% 7.2 2.6 5.2 4.7 2.4 Mobile as a % of total user time 1.6 spent across Naspers platforms, Q4 FY2016 Population Population over Mobile users Smartphones PC'
Slide 9: Optimise returns
Optimise returns Consolidate Reduce development spend Improve unit economics Ecommerce development spend* as % of B2C OPEX per order (US$) revenues (fx neutral) 27% 8.8 6.4 • Merged US operations of letgo and Wallapop • +US$100m in new financing FY15 FY16 • Accelerated path to leadership 39% 33% iFo
Slide 10: Financials
FINANCIALS
Slide 11: Synopsis of financials
Synopsis of financials Revenue* (US$m) Development spend* (US$m) Trading profit* (US$m) Currency impact 6% (22%) 1% (14%) 18% (38%) 1,576 121 362 11,541 12,224 953 961 2,246 1,901 FY15 FY16 FY15 FY16 FY15 FY16 Core headline earnings (US$m) Core HEPS (USc) DPS (ZAR) 21% (49%) 17% 11% 285 298 4.70 5.2
Slide 12: Revenue growth driven by Tencent and ecommerce
Revenue growth driven by Tencent and ecommerce Incremental revenue* by segment, YoY (US$m) 24% 35% 10% 1% 3% 14% 6% (22%) 590 1,574 394 (4) (295) ( 1,576 ) 12,224 11,541 FY15 Ecommerce Listed investments Video entertainment Media & other M&A Forex FY16 Revenue* by segment (US$m) Revenue* (US$m) 6% (
Slide 13: Development spend flat on an economic interest basis
Development spend flat on an economic interest basis Incremental development spend* by segment, YoY (US$m) 20% 21% 14% 13% 1% (14%) 193 (202) 138 138 (121) 961 953 FY15 New investments Operating Associates Forex FY16 Consolidated development spend (US$m) Development spend* by segment (US$m) 14% (1%)
Slide 14: Ecommerce continues to gain traction
Ecommerce continues to gain traction Revenue and trading losses* (US$m) Revenue split 1 2 3 4 5 6 7 8 9 10 Etail (62%) 6% (24%) Marketplace (13%) Naspers Ventures (6%) 397 Classifieds (8%) Payments (5%) Travel (3%) Other (3%) 2,492 2,647 1,986 Constant currency revenue growth by type 28% (31%) 67% 4
Slide 15: Profitable ecommerce businesses gaining momentum
Profitable ecommerce businesses gaining momentum Number of profitable ecommerce entities Financial progress of profitable entities (US$m) 1 2 3 4 5 6 7 1% (18%) 130 21 15 33% (48%) 765 774 33 288 217 FY15 FY16 FY 15 FY 16 Revenue Trading profit Currency impact 15
Slide 16: VE financials reflective of challenging macro environment
VE financials reflective of challenging macro environment Video entertainment (VE) financials* (US$m) 1 2 3 4 5 6 7 8 9 10 11% 3,582 3,830 3,413 17% 841 732 610 FY 14 FY 15 FY 16 Revenue Trading profit Development spend (US$m) Programming and production costs (US$m) Capital expenditure (US$m) 8% 462
Slide 17: Avito a transformational M&A transaction
Avito a transformational M&A transaction Acquisition spend over time (US$m) FY16 M&A by segment (US$m) 1,495 Other Various Etail 4yr avg US$442m (Mar12 – Mar15) Etail (8%) Classifieds (89%) 465 Naspers Ventures (2%) 420 Other (1%) FY14 FY15 FY16 17
Slide 18: Summarised income statement
Summarised income statement US$m Mar 15 Mar 16 Revenue* 11,541 12,224 Less: Equity-accounted investments (4,972) (6,294) Consolidated revenue 6,569 5,930 Trading profit 298 179 Trading margin 5% 3% Net finance costs (251) (352) Share of equity accounted results 1,475 1,289 - excluding net gain resul
Slide 19: Free cash flow affected by weaker results from VE outside SA
Free cash flow affected by weaker results from VE outside SA FCF breakdown (US$m) (36) (38) 8 46 (96) 64 (24) FY15 Operating profit Working capital Capex Increased dividends Other FY16 19
Slide 20: Balance sheet strong following equity raise
Balance sheet strong following equity raise Group net consolidated debt (US$m) US$m Mar 16 30% 23% 30% 20% Debt (1): (offshore US$2.9bn) (2,926) 12% 1,994 10% 1,461 0% Cash: (South Africa US$1.2bn) 1,713 1,213 -10% -20% Closing net debt (1,213) - -30% FY14 FY15 FY16 Gearing 12% Net debt Gearing % (1
Slide 21: Internet
INTERNET
Slide 22: B2C: building scale in etail and structured marketplaces
B2C: building scale in etail and structured marketplaces B2C: Revenue* (US$) B2C: FY16 GMV by region* 10% (24%) 244 1,988 1,812 1,376 India & SE Asia (29%) Europe (65%) FY14 FY15 FY16 Africa & Middle East (6%) *Includes etail, structured and unstructured marketplaces. Results reported on an economic
Slide 23: India B2C: Flipkart well positioned
India B2C: Flipkart well positioned Share of time spent in mobile apps (March 2016) 7% Other 18% Leading horizontal B2C platforms in India Snapdeal Amazon 22% Flipkart Flipkart mobile monthly active users (m) 59% 53% Source: SimilarWeb, company data Mar 15 Mar 16 23
Slide 24: Allegro: accelerating growth and improving profitability
Allegro: accelerating growth and improving profitability FY16 financial summary (PLNm) 1,140 462 370 Revenue Trading profit Free cash flow 20 MM+ 100 K+ 90% Annual GMV growth rate Registered Active B2C Brand recognition 12.2% users merchants 9.0% #1 Shopping destination in Poland (ex-food) 5.1% #1 I
Slide 25: India travel: capitalising on a large opportunity
India travel: capitalising on a large opportunity India OTA market to grow at 5yr-CAGR of 16% Ibibo outpacing competition on gross bookings 37% 31% 55% 12% Gross bookings (US$m) 19 17 GMV (US$bn) 14 13 11 9 2015 2016 2017 2018 2019 2020 FY15 FY16 Source: Goldman Sachs, Phocuswright ibibo Nearest com
Slide 26: Classifieds: attractive business model, great returns at maturity
Classifieds: attractive business model, great returns at maturity Market leaders generate substantial revenues… 2015 Revenues in US$ millions Scout24 437 Autotrader 413 Leboncoin 199 Finn 183 Trademe 140 Blocket 114 … at high EBITDA margins 2015 EBITDA margins Scout24 42% Autotrader 56% Leboncoin 62
Slide 27: Classifieds: massive footprint for the OLX Group
Classifieds: massive footprint for the OLX Group Global footprint 40 Countries +20 Offices +2,000 Employees Mobile leadership Scale #1 app +4.3 +1.7bn +35b 20 COUNTRIES (1) APP RATING MONTHLY MONTHLY VISITS PAGE VIEWS 1) Google play store; shopping/lifestyle categories 27 Note: exlcudes letgo, inclu
Slide 28: Classifieds: building leading platforms
Classifieds: building leading platforms Bring it to the next level - US app-only attack - Launch more car and real estate verticals - Leverage Avito Monetisation Key investment Emerging countries countries markets Ramp monetisation to Mature consumer-to- Identify growth models full potential through
Slide 29: Classifieds: building leading platforms
Classifieds: building leading platforms Revenue* (US$m) FY16 Marketing spend* (US$m) 1 2 3 4 5 41% (67%) 6 7 48 11% 9% (48%) 24 139 111 120 98 H1 H2 FY15 FY16 FY15 FY16 Currency impact *Data reflecting 100% of controlled entities as per March 2016, excluding new Letgo investment. Historic numbers ad
Slide 30: Classifieds: continue to monetise and extend current positions
Classifieds: continue to monetise and extend current positions Naspers positions (number of countries) 24 25 24 21 16 12 9 10 8 5 5 5 5 6 3 2 3 2 1 1 Entering Fighting Leading Leading and monetising 2014 1HFY15 2HFY15 1HFY16 2HFY16 Monthly unique listers (m)* Net new listings (daily, m)* 34% 38% 16
Slide 31: Classifieds: ramping monetisation in Poland
Classifieds: ramping monetisation in Poland Revenue (PLN per internet user) Format Brand 3.4 Horizontal 2.8 +79% +75% Vehicles 1.9 1.6 Real estate H1 H2 FY15 FY16 31
Slide 32: Classifieds: ramping monetisation in Russia
Classifieds: ramping monetisation in Russia Monthly unique listers (m) Revenue split 24% 6% 5% 1% 15% Shop fees 34% Listing fees 27% Advertising 4.2 Value-added services 3.4 59% 53% Mar 15 Mar 16 FY 15 FY 16 Revenue (RUBb) EBITDA (RUBb) 2.0 4.4 +40% 1.8 +84% +78% +52% 3.3 1.3 1.1 2.5 2.2 H1 H2 H1 H2
Slide 33: Classifieds: Latam is maturing
Classifieds: Latam is maturing Maturity index* Poland Sep 2013 Poland March 2016 17.1 28.8 Uruguay 18.2 Costa Rica 15.7 Ecuador 15.1 Brazil 14.3 Panama 13.9 El Salvador 13.0 Argentina 11.1 Colombia 10.1 Peru 6.8 Guatemala 6.3 *Monthly unique listers per 1,000 middle and high income capita. March 201
Slide 34: Classifieds: Strong in C2C versus competition in India
Classifieds: Strong in C2C versus competition in India People recall OLX more People visit OLX more often People engage more with OLX OLX OLX Active App Users Google Trends OLX DAU 6.1x 2.3x 4.5x Quikr Quikr Quikr Jan 16 Feb 16 Mar 16 Jan 16 Feb 16 Mar 16 Jan 16 Feb 16 Mar 16 Source: Google Trends S
Slide 35: Classifieds: letgo grows and merges with Wallapop in the US
Classifieds: letgo grows and merges with Wallapop in the US Daily listers Daily listings 60K 55K 160K 127K 120K 40K + 80K 20K +339% Key terms 40K +377% • letgo maintains equity & W1 W4 W7 W10 W13 board control of JV • JV will have letgo brand, W1 W4 W7 W10 W13 team and technology • Merger is subject
Slide 36: Listed internet: Tencent delivers another strong performance
Listed internet: Tencent delivers another strong performance Tencent operating profit (RMBm) Revenue mix FY15* 41,764 Value-added services (78%) Online advertising (17%) CAGR +33% Other (5%) 30,411 20,496 *Revenue from ecommerce transactions has been included in “Other” since 1Q15. This amounted to
Slide 37: Listed internet: Mail.ru navigating a challenging environment
Listed internet: Mail.ru navigating a challenging environment Mail.ru EBITDA (RUBm) Revenue mix FY15* 18,123 Online advertising (40%) 16,850 Community IVAS (34%) CAGR +21% MMO Games (25%) 15,087 Other (1%) 11,535 Monthly active users (m) 8,381 4% 78 82 Dec 14 Dec 15 2011 2012 2013 2014 2015 Source:
Slide 38: Video Entertainment
VIDEO ENTERTAINMENT
Slide 39: VE: Significant scale across African countries
VE: Significant scale across 50 African countries “A world of entertainment, anywhere, anytime” Our Businesses DTH DTT SVOD OTHER 39
Slide 40: VE: Significant scale across 50 African countries
VE: Significant scale across 50 African countries Video entertainment subscriber homes (‘000) Change in subscriber mix 2% 2,404 2,256 20% 23% 817 2,563 2,275 377 30% 2,234 27% 23 1,911 1,607 5,406 5,732 5,008 50% 50% 4,451 3,981 FY12 FY13 FY14 FY15 FY16 FY15 FY16 SA DTH SSA DTH SSA DTT Premium Compa
Slide 41: VE: impact of currency devaluations on the business
VE: impact of currency devaluations on the business YoY currency declines Hedging policy Zambia Angola South Africa Nigeria Kenya • Cover between 80% - 100% of net SA exposure -14% -10% • Cover between 12 – 24 months forward -25% -33% Weighted average decline YoY -24% -52% US$ FX Cover US$m ZAR rate
Slide 42: VE: strong economic headwinds hit DTH sub-Saharan Africa
VE: strong economic headwinds hit DTH sub-Saharan Africa SSA SSAnet netadditions additions(‘000) (‘000) 225 215 208 average 78 108 121 33 (321) 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 SSA ARPU (US$) SSA DTH operating cash flow and capex (US$m) 11% Capex 36 Operating cash flow 32 219 89 (11) (19) (16
Slide 43: VE: DTT continue to scale, approaching break-even
VE: DTT continue to scale, approaching break-even Subscribers (m) FY16 2,404 FY15 2,256 FY14 817 FY13 377 FY12 23 Total DTT spend (US$m) 190 75% 64% 163 128 66 47 24 FY14 FY15 FY16 Development spend Capex 43
Slide 44: VE: DTH South Africa holding up better, for now
VE: DTH South Africa holding up better, for now SA net additions (‘000) 309 283 average 248 232 187 166 156 169 1H13 2H13 1H14 2H14 1H15 2H15 1H16 2H16 SA ARPU (US$) SA ARPU (ZAR) PVR’s (‘000) 2% 29 17% 11% 24 337 344 1,180 1,067 FY15 FY16 FY15 FY16 FY15 FY16 44
Slide 45: Outlook
OUTLOOK
Slide 46: FY17 Outlook: continue building our platforms
FY17 Outlook: continue building our platforms TARGET TRANSFORM LEAD IN OPTIMISE HIGH-GROWTH PURSUE SCALE FURTHER INTO ECOMMERCE RETURNS BUSINESS MODELS MOBILE Build strong global or Classifieds, B2C, Pursue further scale Mobile first or only Reduce development regional ecommerce Fintech and O2O in c
Slide 47: Appendix
APPENDIX
Slide 48: Glossary of terms
Glossary of terms — ARPU: Average Revenue Per User — IVAS: Internet Value-Added Service — B2C: Business to Consumer — M&A: Mergers and Acquisitions — C2C: Consumer to Consumer — O2O: Online to Offline — CAGR: Cumulative Annual Growth Rate — OTA: Online Travel Agent — DPS: Dividend per Share — PVR: P
Slide 49: Thank you
THANK YOU Meloy Horn +27 11 289 3320 +27 82 7727 123 [email protected] www.naspers.com